ClearView Economics, LLC
I’ll make two observations about the government shutdown.
First, what was the real cause of the shutdown? The true cause of the shutdown was the fact that Congress failed to complete a budget – by September 30 – before the new fiscal year began. Some areas of appropriations, like the defense budget, were in place as FY2019 began. Other areas of the budget, however, encompassing the 800,000 government workers, were not nailed down as the new fiscal year started. These areas were running on “automatic pilot,” in the form of a continuing resolution. Time ran out on the authority to spend without a budget deal in place. Obviously, one side wanted spending for “the wall” and the other side didn’t. On $4.1 trillion of annual government spending outlays, $5.7 billion of spending on some fashion of a border barrier is inconsequential.
My second observation regarding the government shutdown concerns its economic (i.e., GDP) impact. Various es…